How to talk about money and share financial knowledge with friends and family

A recent survey of financial attitudes by the Australian Securities and Investments Commission uncovered some disturbing findings about the way people think about money. Some 35 per cent of women said that they found dealing with money stressful and overwhelming, while 39 per cent of all people under the age of 35 agreed with the same statement.

One in five of those surveyed believed there was nothing they could do that "will make much difference" to their financial situation. Some 35 per cent of females said they often bought things on impulse. Nearly 60 per cent of respondents said they had either never heard of, or did not understand, the concept of diversification.

I was chatting to a group of women a few weeks ago about how we could help each other improve our understanding of personal finance concepts.

We decided that each of us who had a greater understanding of the subject should take it upon ourselves to start a conversation with someone who had less knowledge.

In other words, we would take it upon ourselves to gain knowledge and then share that knowledge with others.

We decided we didn't need to be professional advisers ourselves. With any luck, having a conversation alone would prompt friends and loved ones to think about their personal balance sheets – and get them on a path to taking some action and perhaps seeking professional advice if they felt that was needed.

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That could be a great gift.

So this is my challenge. Start a conversation. For example, ask a niece how many superannuation funds she has. (ANZ Banking Group says that it consolidated more than 160,000 super accounts in 2015, saving those members a combined $20 million in fees). Ask a friend what sort of retirement they would like to have and how they are going about saving to fulfil their dream. Ask another friend where their savings are and suggest they do a bit of research if their long-term savings are in the bank. Challenge a nephew to buy one less coffee a day or a less expensive car.

These are the sorts of conversations that can help friends and family to take more control over their lives and in many cases relieve stress.

You might just be able to give someone a starting point, even if you don't have all the answers yourself.

The where and when for such a conversation, which could get quite personal, could be tricky.

We decided that sitting down over a cup of coffee or even a glass of wine might not work for everyone, because not everyone wants to look at another person in the eye when they are disclosing personal information. Better, perhaps to be walking in a park or along a beach, where you can both gaze into the distance.

The important part is to start a conversation.

Money means women's independence

Money is such an intrinsic part of female empowerment that women should not hesitate in talking about it with their friends, according to Elle Aram.

The 34-year-old management consultant says that even highly educated career women of her generation do not realise that what money means primarily is independence.

"All of my girlfriends are brilliant, intelligent, shining women and far more capable and better at their work than their male counterparts yet they take their foot off the gas when they get into a relationship," says Aram.

"If they're going to take the decision to step back from the workforce, then they must realise what they're actually giving up. It's not just work and mental stimulation, it's financial independence."

Singaporean-born Aram, who married a Melbourne chiropractor this year, says she discovered this in a previous relationship when she was in her 20s.

"There I was, educated and empowered and staying at home. It was completely contradictory and I didn't enjoy it," she says.

"But we base our relationships on what we know, which is the sort of relationships our parents had, where mum's career is not as important as dad's. We're educating out daughters and sending them out in careers and when they suddenly get married, the money and power start to shift."

Aram says many of her friends – all young, professional women ("lots and lots of lawyers, finance, consulting, IT") assume there will be a "happy ever after" to their financial future.

Aram is not afraid to mix money and friendship. She launched an online custom swimwear business, called Kini, two years ago with a friend from her Perth university days. Aram continues to work full time in Melbourne for a major international auditing company.

"I realised in my 20s that in order to be happy and fulfilled I need to work."

Case study: Natasha Hughes

The information in this article should not be taken as financial advice. Please consider your personal circumstances before making any financial decisions.